NEW YORK - Wall Street extended its gains to a second day Thursday after an upbeat profit report from Best Buy Co. and new unemployment numbers added to a sense that the economy might be finding its footing.

But stocks wavered in their advance in a give-and-take that wasn't surprising for a market that has surged about 20 percent in 12 days.

"I'm a big fan of the periods of digestion," said David Waddell, senior investment strategist and chief executive of Waddell & Associates. "I prefer marathons to sprints, one step forward, half step back. That's a very healthy sign."

Photo by Elize Amendola / Associated PressBest Buy, the world's largest consumer electronics retailer, announced Thursday that its fourth-quarter profit fell 23 percent on some charges but adjusted results beat analysts' estimates as sales climbed on new store openings. Shown here is the Best Buy store in Danvers.

Investors latched on to good news. The report from Best Buy boosted hopes that shoppers could show more resilience than some analysts had expected. Consumer spending accounts for about two-thirds of U.S. economic activity.

Readings on U.S. economic activity in the fourth quarter and weekly unemployment claims out Thursday both came in ahead of expectations, providing more reassurance to investors that the economy is showing signs of stabilizing.

Banking stocks gave up some ground as the Obama administration unveiled a sweeping overhaul of the financial system designed to place greater regulation on big market players like hedge funds.

In midday trading, the Dow Jones industrial average rose 72.56, or 0.9 percent, to 7,822.37.

About three stocks rose for every one that fell on the New York Stock Exchange, where volume came to 582.5 million shares.

Stocks managed an advance Wednesday after fractious trading. Economic data that came in ahead of expectations brought in buyers and helped offset worries over lackluster demand at a government debt auction.

Bond prices barely moved. The yield on the benchmark 10-year Treasury note, which moves opposite to its price, was unchanged from late Wednesday at 2.79 percent. The yield on the three-month T-bill rose to 0.17 percent from 0.15 percent.

The dollar was mixed against other major currencies, while gold prices rose.

Oil rose 85 cents to $53.62 a barrel on the New York Mercantile Exchange.

Best Buy, the world's largest consumer electronics retailer, said its fiscal fourth-quarter earnings fell 23 percent as it booked some one-time expenses. Results stripping out those costs beat analysts' estimates as sales climbed on store openings. Best Buy rose $5.30, or 15.8 percent, to $38.70.

Earnings at Dr Pepper Snapple Group Inc. also came in ahead of what Wall Street had been expecting. The stock rose $1.47, or 9.5 percent, to $16.98.

Meanwhile, the number of workers seeking unemployment benefits rose slightly last week, though less than economists forecast. The total number of people claiming benefits jumped to 5.56 million, higher than economists projected. It was the ninth straight record high.

The government also reported that the nation's gross domestic product shrank at a 6.3 percent pace in the fourth quarter. That was a bigger drop than the government previously estimated but not as severe as analysts predicted.

Kevin Kramer, chief operating officer at West End Financial Advisors, an asset management company in New York, said that stocks have risen too fast as ebullient traders have been quick to look past a long list of trouble spots in the economy. He contends unemployment, limited access to credit and heavy loads of debt will continue to curtail growth.